FACTS: Respondent Karen T.

Go filed two complaints before the RTC for replevin and/or sum of money with damages against Navarro. In
these complaints, Karen Go prayed that the RTC issue writs of replevin for the seizure of two (2) motor vehicles in Navarros possession.
In his Answers, Navarro alleged as a special affirmative defense that the two complaints stated no cause of action, since Karen Go was
not a party to the Lease Agreements with Option to Purchase (collectively, the lease agreements) the actionable documents on which
the complaints were based. RTC dismissed the case but set aside the dismissal on the presumption that Glenn Gos (husband) leasing
business is a conjugal property and thus ordered Karen Go to file a motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4,
Section 3 of the Rules of Court. Navarro filed a petition for certiorari with the CA. According to Navarro, a complaint which failed to state a
cause of action could not be converted into one with a cause of action by mere amendment or supplemental pleading. CA denied petition.
ISSUE: Whether or not Karen Go is a real party in interest.
HELD: YES. Karen Go is the registered owner of the business name Kargo Enterprises, as the registered owner of Kargo Enterprises,
Karen Go is the party who will directly benefit from or be injured by a judgment in this case. Thus, contrary to Navarros contention, Karen
Go is the real party-in-interest, and it is legally incorrect to say that her Complaint does not state a cause of action because her name did
not appear in the Lease Agreement that her husband signed in behalf of Kargo Enterprises.
Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered under this name; hence, both have an
equal right to seek possession of these properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the
recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not
even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the suit is presumed to
have been filed for the benefit of all co-owners.
We hold that since Glenn Go is not strictly an indispensable party in the action to recover possession of the leased vehicles, he only
needs to be impleaded as a pro-forma party to the suit, based on Section 4, Rule 4 of the Rules, which states:
Section 4.Spouses as parties. Husband and wife shall sue or be sued jointly, except as provided by law.
Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder of indispensable parties in a complaint is
not a ground for dismissal of action as per Rule 3, Section 11 of the Rules of Court.

THE COURTS RULING

We find the petition devoid of merit.

Karen Go is the real party-in-interest

The 1997 Rules of Civil Procedure requires that every action must be
prosecuted or defended in the name of the real party-in-interest, i.e., the
party who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit. [15]
Interestingly, although Navarro admits that Karen Go is the registered owner of the business
name Kargo Enterprises, he still insists that Karen Go is not a real party-in-interest in the case.
According to Navarro, while the lease contracts were in Kargo Enterprises name, this was
merely a trade name without a juridical personality, so the actual parties to the lease agreements
were Navarro and Glenn Go, to the exclusion of Karen Go.

As a corollary, Navarro contends that the RTC acted with grave abuse of discretion when
it ordered the inclusion of Glenn Go as co-plaintiff, since this in effect created a cause of action
for the complaints when in truth, there was none.

We do not find Navarros arguments persuasive.

The central factor in appreciating the issues presented in this case is the business name
Kargo Enterprises. The name appears in the title of the Complaint where the plaintiff was
identified as KAREN T. GO doing business under the name KARGO ENTERPRISES, and this
identification was repeated in the first paragraph of the Complaint.Paragraph 2 defined the
business KARGO ENTERPRISES undertakes. Paragraph 3 continued with the allegation that
the defendant leased from plaintiff a certain motor vehicle that was thereafter
described. Significantly, the Complaint specifies and attaches as its integral part the Lease
Agreement that underlies the transaction between the plaintiff and the defendant. Again, the
name KARGO ENTERPRISES entered the picture as this Lease Agreement provides:

This agreement, made and entered into by and between:

GLENN O. GO, of legal age, married, with post office address at xxx, herein
referred to as the LESSOR-SELLER; representing KARGO ENTERPRISES as its
Manager,

xxx

thus, expressly pointing to KARGO ENTERPRISES as the principal that Glenn O. Go

represented. In other words, by the express terms of this Lease Agreement, Glenn Go did sign
the agreement only as the manager of Kargo Enterprises and the latter is clearly the real party to
the lease agreements.

As Navarro correctly points out, Kargo Enterprises is a sole proprietorship, which is

neither a natural person, nor a juridical person, as defined by Article 44 of the Civil Code:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created
by law; their personality begins as soon as they have been constituted according to
law;
(3) Corporations, partnerships and associations for private interest or purpose to
which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.

Thus, pursuant to Section 1, Rule 3 of the Rules, [16] Kargo Enterprises cannot be a party
to a civil action. This legal reality leads to the question: who then is the proper party to file an
action based on a contract in the name of Kargo Enterprises?

We faced a similar question in Juasing Hardware v. Mendoza,[17] where we said:

Finally, there is no law authorizing sole proprietorships like petitioner to bring

suit in court. The law merely recognizes the existence of a sole proprietorship as a form
of business organization conducted for profit by a single individual, and requires the
proprietor or owner thereof to secure licenses and permits, register the business name,
and pay taxes to the national government. It does not vest juridical or legal personality
upon the sole proprietorship nor empower it to file or defend an action in court.

Thus, the complaint in the court below should have been filed in the name of
the owner of Juasing Hardware. The allegation in the body of the complaint would
show that the suit is brought by such person as proprietor or owner of the business

conducted under the name and style Juasing Hardware. The descriptive words
doing business as Juasing Hardware may be added to the title of the case, as is
customarily done.[18] [Emphasis supplied.]

This conclusion should be read in relation with Section 2, Rule 3 of the Rules, which
states:

SEC. 2. Parties in interest. A real party in interest is the party who stands to
be benefited or injured by the judgment in the suit, or the party entitled to the avails
of the suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party in interest.

As the registered owner of Kargo Enterprises, Karen Go is the party who will directly
benefit from or be injured by a judgment in this case. Thus, contrary to Navarros contention,
Karen Go is the real party-in-interest, and it is legally incorrect to say that her Complaint does
not state a cause of action because her name did not appear in the Lease Agreement that her
husband signed in behalf of Kargo Enterprises. Whether Glenn Go can legally sign the Lease
Agreement in his capacity as a manager of Kargo Enterprises, a sole proprietorship, is a
question we do not decide, as this is a matter for the trial court to consider in a trial on the
merits.

Glenn Gos Role in the Case

We find it significant that the business name Kargo Enterprises is in the

name of Karen T. Go,[19] who described herself in the Complaints to be a
Filipino, of legal age, married to GLENN O. GO, a resident of Cagayan de Oro
City, and doing business under the trade name KARGO ENTERPRISES.
[20]
That Glenn Go and Karen Go are married to each other is a fact never
brought in issue in the case. Thus, the business name KARGO ENTERPRISES
is registered in the name of a married woman, a fact material to the side
issue of whether Kargo Enterprises and its properties are paraphernal or

conjugal properties. To restate the parties positions, Navarro alleges that

Kargo Enterprises is Karen Gos paraphernal property, emphasizing the fact
that the business is registered solely in Karen Gos name. On the other hand,
Karen Go contends that while the business is registered in her name, it is in
fact part of their conjugal property.

The registration of the trade name in the name of one person a woman
does not necessarily lead to the conclusion that the trade name as a
property is hers alone, particularly when the woman is married. By law, all
property acquired during the marriage, whether the acquisition appears to
have been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved.[21] Our
examination of the records of the case does not show any proof that Kargo
Enterprises and the properties or contracts in its name are conjugal. If at all,
only the bare allegation of Navarro to this effect exists in the records of the
case. As we emphasized in Castro v. Miat:[22]

Petitioners also overlook Article 160 of the New Civil Code. It

provides that all property of the marriage is presumed to be
conjugal partnership, unless it be prove[n] that it pertains
exclusively to the husband or to the wife. This article does not
require proof that the property was acquired with funds of
the partnership. The presumption applies even when the manner
in which the property was acquired does not appear.[23] [Emphasis
supplied.]

Thus, for purposes solely of this case and of resolving the issue of whether
Kargo Enterprises as a sole proprietorship is conjugal or paraphernal
property, we hold that it is conjugal property.

Article 124 of the Family Code, on the administration of the conjugal

property, provides:

Art. 124. The administration and enjoyment of the

conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husbands decision shall prevail,
subject to recourse to the court by the wife for proper remedy, which
must be availed of within five years from the date of the contract
implementing such decision.

xxx

This provision, by its terms, allows either Karen or Glenn Go to speak

and act with authority in managing their conjugal property, i.e., Kargo
Enterprises. No need exists, therefore, for one to obtain the consent of the
other before performing an act of administration or any act that does not
dispose of or encumber their conjugal property.

Under Article 108 of the Family Code, the conjugal partnership is

governed by the rules on the contract of partnership in all that is not in
conflict with what is expressly determined in this Chapter or by the spouses
in their marriage settlements. In other words, the property relations of the
husband and wife shall be governed primarily by Chapter 4 on Conjugal
Partnership of Gains of the Family Code and, suppletorily, by the spouses
marriage settlement and by the rules on partnership under the Civil Code. In
the absence of any evidence of a marriage settlement between the spouses
Go, we look at the Civil Code provision on partnership for guidance.

A rule on partnership applicable to the spouses circumstances is Article

1811 of the Civil Code, which states:
Art. 1811. A partner is a co-owner with the other partners of specific
partnership property.

The incidents of this co-ownership are such that:

(1) A partner, subject to the provisions of this Title and to any

agreement between the partners, has an equal right with his

partners to possess specific

partnership purposes; xxx

partnership

property for

Under this provision, Glenn and Karen Go are effectively co-owners of

Kargo Enterprises and the properties registered under this name; hence,
both have an equal right to seek possession of these properties. Applying
Article 484 of the Civil Code, which states that in default of contracts, or
special provisions, co-ownership shall be governed by the provisions of this
Title, we find further support in Article 487 of the Civil Code that allows any
of the co-owners to bring an action in ejectment with respect to the coowned property.

While ejectment is normally associated with actions involving real

property, we find that this rule can be applied to the circumstances of the
present case, following our ruling in Carandang v. Heirs of De Guzman.[24] In
this case, one spouse filed an action for the recovery of credit, a personal
property considered conjugal property, without including the other spouse in
the action. In resolving the issue of whether the other spouse was required
to be included as a co-plaintiff in the action for the recovery of the credit,
we said:

Milagros de Guzman, being presumed to be a co-owner of the

credits allegedly extended to the spouses Carandang, seems to be
either an indispensable or a necessary party. If she is an
indispensable party, dismissal would be proper. If she is merely a
necessary party, dismissal is not warranted, whether or not there was
an order for her inclusion in the complaint pursuant to Section 9, Rule
3.

Article 108 of the Family Code provides:

Art. 108. The conjugal partnership shall be governed

by the rules on the contract of partnership in all that is not
in conflict with what is expressly determined in this
Chapter or by the spouses in their marriage settlements.

This provision is practically the same as the Civil Code provision it

superseded:

Art. 147. The conjugal partnership shall be governed

by the rules on the contract of partnership in all that is not
in conflict with what is expressly determined in this
Chapter.

In this connection, Article 1811 of the Civil Code provides that

[a] partner is a co-owner with the other partners of specific
partnership property. Taken with the presumption of the conjugal
nature of the funds used to finance the four checks used to pay for
petitioners stock subscriptions, and with the presumption that the
credits themselves are part of conjugal funds, Article 1811 makes
Quirino and Milagros de Guzman co-owners of the alleged credit.

Being co-owners of the alleged credit, Quirino and Milagros de

Guzman may separately bring an action for the recovery thereof. In
the fairly recent cases of Baloloy v. Hular andAdlawan v.
Adlawan, we held that, in a co-ownership, co-owners may bring
actions for the recovery of co-owned property without the
necessity of joining all the other co-owners as co-plaintiffs
because the suit is presumed to have been filed for the
benefit of his co-owners. In the latter case and in that of De
Guia v. Court of Appeals, we also held that Article 487 of the Civil
Code, which provides that any of the co-owners may bring an action
for ejectment, covers all kinds of action for the recovery of
possession.

In sum, in suits to recover properties, all co-owners are real

parties in interest. However, pursuant to Article 487 of the Civil
Code and relevant jurisprudence, any one of them may bring an
action, any kind of action, for the recovery of co-owned properties.
Therefore, only one of the co-owners, namely the co-owner
who filed the suit for the recovery of the co-owned property,
is an indispensable party thereto. The other co-owners are not
indispensable parties. They are not even necessary parties, for a

complete relief can be accorded in the suit even without their

participation, since the suit is presumed to have been filed for the
benefit of all co-owners.[25] [Emphasis supplied.]

Under this ruling, either of the spouses Go may bring an action against
Navarro to recover possession of the Kargo Enterprises-leased vehicles
which they co-own. This conclusion is consistent with Article 124 of the
Family Code, supporting as it does the position that either spouse may act
on behalf of the conjugal partnership, so long as they do not dispose of or
encumber the property in question without the other spouses consent.

On this basis, we hold that since Glenn Go is not strictly an

indispensable party in the action to recover possession of the leased
vehicles, he only needs to be impleaded as a pro-forma party to the suit,
based on Section 4, Rule 4 of the Rules, which states:
Section 4. Spouses as parties. Husband and wife shall sue or be
sued jointly, except as provided by law.

Non-joinder of indispensable parties not

ground to dismiss action

Even assuming that Glenn Go is an indispensable party to the

action, we have held in a number of cases [26] that the misjoinder or nonjoinder of indispensable parties in a complaint is not a ground for dismissal
of action. As we stated in Macababbad v. Masirag:[27]
Rule 3, Section 11 of the Rules of Court provides that neither
misjoinder nor nonjoinder of parties is a ground for the dismissal of
an action, thus:

Sec. 11. Misjoinder and non-joinder of parties. Neither

misjoinder nor non-joinder of parties is ground for

dismissal of an action. Parties may be dropped or added

by order of the court on motion of any party or on its own
initiative at any stage of the action and on such terms as
are just. Any claim against a misjoined party may be
severed and proceeded with separately.

In Domingo v. Scheer, this Court held that the proper remedy

when a party is left out is to implead the indispensable party at any
stage of the action. The court, either motu proprio or upon the
motion of a party, may order the inclusion of the indispensable party
or give the plaintiff opportunity to amend his complaint in order to
include indispensable parties. If the plaintiff to whom the order to
include the indispensable party is directed refuses to comply with
the order of the court, the complaint may be dismissed upon motion
of the defendant or upon the court's own motion. Only upon
unjustified failure or refusal to obey the order to include or to amend
is the action dismissed.

In these lights, the RTC Order of July 26, 2000 requiring plaintiff Karen Go to
join her husband as a party plaintiff is fully in order.